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Mary purchased an annuity contract for $90,720 on February 28, 20X7. She is to receive $800 per month starting August 1, 20X7, and continuing for

Mary purchased an annuity contract for $90,720 on February 28, 20X7. She is to receive $800 per month starting August 1, 20X7, and continuing for life. She has a life expectancy of 27 years. What is the amount of Marys annuity income that must be included in her gross income for 20X7?

a. $3,360

b. $2,600

c. $6,240

d. $1,400

e. None of the answers provided is correct.

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